Buried deep in the news, but noticed by yours truly, is the new reality that it is not safe for any foreign consulting firm to conduct due diligence investigations in the PRC any more. Please refrain from sending any of your staff to china to engage in enhanced due diligence on major projects, because they may end up barred from leaving the country, or worse.
Apparently, China is now (1) restricting the disclosure of open-source unclassified financial data about Chinese companies, on the dubious grounds of National Security, (2) imposing extremely vague and broad laws, designed to charge foreign consultants whom the PRC wants to discourage from performing EDD on local companies for foreign investors,(3) Raiding foreign consultancies without legal grounds, playing the National Security violation card, and (4) Barring foreign companies from closing down and leaving the PRC.
Exit Bans, where the foreign businessman is barred from leaving China pending the resolution of some civil dispute, could strand your compliance officer there, literally for years. Do NOT send anyone to China for the purpose of conducting EDD, unless you want to risk losing a valuable asset, and do not choose to go yourself to do that work, no matter how lucrative the business. If you have never been in custody for any length of time, you do not want to have that experience, which apparently includes interrogation while in detention in China.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.